Shares of Papa John's (PZZA - Get Report)  on Wednesday are rising after the chain was upgraded to buy from hold with a $60 price target at Stifel.

The shares of the Louisville, Ky., company jumped during Tuesday's session after it tapped former Arby's President Rob Lynch as CEO. Lynch succeeded Steve Ritchie in the top post. Arby's is a portfolio company of the private-equity firm Roark Capital.

Stifel previously had a $42 price target on the stock. The new target represents 25% potential upside from the stock's previous close at $48. Papa John's shares on Wednesday are trading up 6% at $50.87.

The new CEO's "turnaround experience and marketing expertise improves the company's prospects of delivering positive [same restaurant sales] gains over the coming quarters," Stifel analyst Chris O'Cull wrote. 

"[And] that sentiment towards the stock will improve as investors assign a higher probability it can recover a meaningful portion of the roughly $100 million earnings before interest, taxes, depreciation and amortization it has lost since 2017."

O'Cull said that after speaking to management, he determined that franchisee profitability will be a top priority at the company.

"Additionally, we would not be surprised if the company made efforts to break through the promotional clutter by offering new products, such as the Papadia, and by taking more risks with marketing messages," O'Cull said.

Papadias are sandwiches or quesadillas with assorted meat, cheese and vegetable fillings.

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